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Sunday, 11 July 2010

Abu Dhabi is reluctant to invest in BP, a report said, only days after the British company's chief was thought to have sought investment from sovereign wealth funds on a visit to the Gulf state.

Citing sources, the Middle East Economic Survey said it "understands that Abu Dhabi has signaled a reluctance to buy into BP," in its latest edition to be published on Monday.

"Sources close to Abu Dhabi investment funds said that they are already in court over a Citigroup investment and that the move would be too politically charged and there are too many unknowns," the MEES newsletter said.

Egypt’s benchmark rose to the highest this month, leading a rally in Middle East markets, as concern about the global economic recovery faded and earnings in the Gulf boosted investor confidence. Israel stocks also gained.

The EGX 30 Index advanced 1.4 percent to 6,112.96 at 1:16 p.m. in Cairo, the highest intraday level since June 30, led by Commercial International Bank Egypt SAE, the biggest publicly traded bank in the country. Citadel Capital Corp. increased as much as 2.4 percent after one of its subsidiaries announced signing a $130 million contract to build a cement plant. The Bloomberg GCC 200 Index climbed 0.5 percent.

The International Monetary Fund raised its global growth forecast last week and lower-than-estimated U.S. jobless claims boosted optimism that the economy will avoid slipping back into recession. The Standard & Poor’s 500 Index gained 0.7 percent on July 9, bringing the jump for the week to 5.4 percent. Saudi Arabia’s Tadawul All Share Index surged the most in a month yesterday and advanced 0.7 percent today.

By undertaking such big development plans, Al-Mutoteh noted that Kuwait will welcome Korean firms to carry out building and construction projects for oil refining, electronic power plants, infrastructure development, housing, hospitals and schools for new cities.

Troubled state conglomerate Dubai World has invited creditors to a July 22 meeting to offer details on its proposed debt restructuring, the first such session to include all lenders since December last year.

Three sources from among the group's 80 creditors told Reuters they had received the invitation via the coordinating committee of seven banks that hold 60 percent of Dubai World's $14.4 billion in bank debt.

The flagship state conglomerate, which shocked investors in November with news it could not pay its debts, will try to secure wider backing from the meeting for an outline restructuring deal struck with a coordinating commmittee of lenders in May.

Only one bell will ring at the start of trade in Dubai this morning as investors buy and sell shares from a single platform for the first time, ending the separate existence of the emirate’s two bourses.

Stock pickers hoping for a sudden surge in trading volumes to lift the markets from their malaise may be disappointed but the consolidation of the Dubai Financial Market (DFM) and NASDAQ Dubai should at least help the international visibility of local publicly traded companies, analysts say.

It will also usher in some changes to the way NASDAQ Dubai shares are distributed to investors. Before the bourses came together, brokers who were registered to trade on NASDAQ allocated the shares to individual clients.

Saudi shares gained the most in a month after second-quarter earnings came in above analysts’ expectations and as U.S. and European stocks rose and crude oil prices advanced.

Saudi Basic Industries Corp., the world’s largest petrochemical maker, Al Rajhi Bank, the kingdom’s largest lender by market value, and Samba Financial Group paced the rise, as all 15 industry groups climbed. The Tadawul All Share Index rose 2.4 percent to 6,200.26, the highest level since June 28. The gauge gained 0.4 percent last week.

THREE years ago, when Joseph Rohm, manager of the T. Rowe Price Africa and Middle East fund, visited Lagos, the capital of Nigeria, he was chaperoned by guards carrying semiautomatic weapons. These days, he strolls the streets alone. “I feel safer in Lagos than I do in Johannesburg,” said Mr. Rohm, a native of South Africa.Enlarge This Image

That transition underscores the changing reality of so-called frontier stock markets, those that are less developed than emerging markets like Brazil, China and India. Countries, whole regions even, that a few years ago were dismissed as perilous to both body and bourse have come into stock market vogue.

Big investment companies have rolled out mutual funds and exchange-traded funds that put all or at least a big chunk of their money in frontier regions. Mr. Rohm’s fund, one of the older offerings, began in 2007. As of the end of April, it had invested about three-fourths of its $207 million in countries including Nigeria, Kenya and Qatar. For the 12 months through June, it returned 17 percent.

The growing national industrial output and the proposed new ports in Doha and Mesaieed are attracting major players in the shipping industry to Qatar, sources yesterday said.

Contrary to the slowdown in the global shipping industry, which is badly hit in the wake of the economic crisis, the cargo moving business in Qatar is poised to grow further in the coming years, they said.

Inquiries made with the country’s shipping circles found that Doha has received some of the leading players in the industry in the last few months and among them is CMA, one of the top three companies in the world.